World War I created difficulties not only for the military, but for the entire world. The end of the war in 1918 was a relief for the American people, but not for the economy. War is extremely burdensome for the economy. Increase in national debt, inflation and decrease in consumption/investment. However, World War I was not a typical war. The Treaty of Versailles placed all war reparations in the hands of Germany, directly punishing the country for starting the war. This allowed the US economy to recover from the war quite quickly, and with new technological developments on the rise, consumer spending increased dramatically. Eventually American citizens began to build credit and spend money in their free time, leading to overconfidence in the American economy. This confidence in the economy led directly to the Great Depression. There are many similarities and differences between the ways the government controlled the economy during the Roaring Twenties and after the Great Depression. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay The role of government in the economy was interesting during the Roaring Twenties. The Roaring Twenties simply represented a change from the old Gilded Age leadership that allowed businesses to run the country. First, during the Roaring Twenties the government had no control over the economy. The economy during this period was controlled by individualism and materialism. This means that private sales, trade, and industry allowed for a constant flow of money, and as long as the money was constantly flowing people could buy things with “credit.” New technologies such as Henry Ford's automobile and Louis Chevrolet after World War I allowed many Americans to travel much faster, which led to citizens having much more free time. Second, leisure helped generate income through America's pastimes. For example, people were extremely interested in the new Major League Baseball and the NFL, so much so that they spent millions of dollars a year. Another popular pastime was going to the movies because, since most Americans spent money on large items, many of them built up enough credit to be able to spend money significantly. About half the nation went to the movies on weekends. It is obvious that during the Roaring Twenties the government was not in control of the economy, but rather the leisure spending of the American people. Government control over the economy changed dramatically as the United States entered the Great Depression. The Great Depression was the worst economic crisis in the history of the modern world. This depression was the result of many problems of the Roaring Twenties. World War I created a high demand for food, which increased food prices, making it difficult for farmers to repay the banks. With such overexploitation of the soil during the 1920s, the soil became dry, making it impossible for crops to hold it. Second, the stock market crash of October 29, 1929 led many Americans to lose faith in the market. This has led too many Americans to withdraw from the market, keeping the economy in the mud. Ultimately, the stock market crash led to the banking crisis, which closed more than 50% of American banks. Investors failed to return their money and people lost faith in banks, so they withdrew all of theirs.